State Court of Appeal sides with Arizona group and issues stay; state's highest court to take up case

By Steven Harmon Bay Area News Group

Posted:
11/02/2012 02:07:24 PM PDT

Updated:
11/02/2012 08:36:43 PM PDT

SACRAMENTO -- The state Supreme Court will decide Monday whether a shadowy Arizona group will have to hand over records related to an $11 million donation it made last month to a California business PAC.

The court on Friday night agreed to an 11th-hour appeal from Fair Political Practices Commission Chairwoman Ann Ravel and Attorney General Kamala Harris after the state Court of Appeal stunned state attorneys by staying a ruling from a Sacramento judge that required the group to submit to an investigation aimed at determining if the group broke campaign-finance laws. The FPPC wants the group to turn over all communications -- emails, notes of phone calls, letters and minutes of meetings -- related to the donation.

"This matter is urgent, as failure to act immediately will, for practical purposes, deny California voters a right under California law to know before the election whether state campaign finance and reporting laws have been complied with," the FPPC appeal said.

Ravel said the state's highest court will take up the case Monday. "We are extremely pleased the California Supreme Court recognized the significance of this case," she said.

The earlier Court of Appeal ruling was a stunning setback for the FPPC, California's political watchdog agency. The ruling, signed by 3rd District Justice Vance Raye without comment, denied the FPPC's petition to overturn an automatic stay requested by attorneys for the Phoenix-based group Americans for Responsible Leadership.

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Reacting to the Supreme Court's decision to take up the case, Matt Ross, the spokesman for the group's legal team, said: "Once again, it is our contention that the Fair Political Practices Commission does not have the legal authority to issue an audit in advance of the election."

The Arizona group had appealed a ruling earlier this week by a Sacramento County Superior Court judge, which had sided with the FPPC and the Attorney General's Office and ordered that emails and other communications be turned over.

The donation was made last month to the Small Business Action Committee, which has been running campaigns against Proposition 30, Gov. Jerry Brown's tax-hike initiative, and for Proposition 32, the measure that would curb labor's ability to collect political cash.

In arguing the case against an investigation at the Sacramento Superior Court hearing, attorney Jason Torchinsky called the FPPC lawsuit politically motivated, "designed to attack our client and our donors as a result of the position ARL is taking on that policy."

Disclosure of donors' names, Torchinsky argued, would deter political participation and chill speech.

"The message here is if your speech is unpopular, expect reprisals and immediate government action," said Torchinsky, who is with the Virginia firm of Holtzman Vogel Josefiak.

FPPC attorney Gary Winuk dismissed those allegations.

"The entire purpose of the FPPC is to make sure that within the confines of the law that disclosure is properly reported," Winuk said. "It grows increasingly more important that disclosure is made before the election."

The managing partner of the law firm representing the Arizona group is Jill Holtzman Vogel, a Virginia state senator with deep ties to the George W. Bush administration. Her Virginia office shares the same building as American Crossroads, the super PAC run by Bush's former political strategist, Karl Rove.

Raye, the justice who signed the ruling, was appointed by Gov. Arnold Schwarzenegger as the court's presiding officer in 2010. He had worked under Gov. George Deukmejian as his deputy legislative secretary and legal affairs secretary after serving in the Attorney General's Office.